Staring Down Disaster

ASSESSING THE RISK
At the heart of disaster preparedness is a business continuity plan, a strategy for operating in an emergency situation. Creating one makes good business sense, says McClure, since customers may flock to a competitor if a businessâ€™ operations are disrupted. A business continuity plan can boost the bottom line, Barton adds, particularly if a business owner sells his company, because â€śa business valuation will be higher if youâ€™ve never had a major disaster disruption.â€ť

To gauge the vulnerabilities specific to your business, take the following steps:Identify industry-specific risks. Research businesses like yours that have experienced calamity, such as earthquakes, fires, or robberies, Barton suggests. Learn what these businesses did and didnâ€™t do as well as what worked and what didnâ€™t so you can include proven strategies within your own companyâ€™s plan.

Check insurance policies. Without adequate insurance, a business can be forced to close. Thatâ€™s what happened to Angelique Moss-Greerâ€™s Clarksville, Tennessee-based herb shop Natural Choices Botanica when it was destroyed by a tornado in 1999. When submitting a claim for the damage, Moss-Greer, now 39, learned that her policy did not include coverage for wind damage, costing her tens of thousands of dollars. â€śI lost everything,â€ť recalls Moss-Greer, who had pumped more than $100,000 in savings into her business over the previous seven years.

To avoid such devastation, Randy Screen, chief insurance marketing executive officer for Winston-Salem, North Carolina-based insurance provider BB&T Insurance Services, recommends checking in annually with an insurance broker and asking, â€śWhat am I not covered for?â€ť Coverage for some losses such as those due to wind, earthquakes, and crime may be excluded from standard policies. Consider acquiring business interruption insurance since it replaces lost income while a business is shut down; and be sure to keep an updated inventory including pictures of office equipment on hand, in case you need to file a claim later.
Prioritize processes. Identify the core functions that keep your business running, such as servicing current customers. Thatâ€™s what your plan will focus on, says McClure. In the event of a disaster, all other tasks can wait.

CREATING THE PLAN
With a thorough risk assessment, a business owner can start thinking of alternative ways of working. After Fields got over the initial shock of seeing his office flooded, he knew he still had Websites to build. And he was prepared. He had already replicated the companyâ€™s computer systems on his laptop, so he was able to set up shop at home. Though he needed to travel to visit clients or meet them at coffee shops, â€śWe were still able to invoice everybody, and we were still able to get projects out,â€ť Fields says.